1. Field of the Invention
The present invention generally relates to computer software. More particularly, the present invention relates to software frameworks for developing financial services software.
2. Description of the Related Art
Financial services organizations have come to rely on complex software systems to administer their businesses. Financial service organizations may include, for example, reinsurance organizations. Reinsurance may include the transfer by a first insurer of all or part of a risk to a second insurer to provide protection against the risk, as well as any associated transactions. In other words, reinsurance can be thought of as “insurance for insurance companies.” When catastrophic events such as earthquakes, floods, tornadoes, hurricanes, airline accidents, etc. occur the insured often file for damage claims to reduce the impact of the loss of property and/or life. The insurance companies, which offer policies to cover for such catastrophic losses, come under severe financial strain to absorb the losses and still maintain the required surplus. The surplus is an insurance company's net worth, i.e. its assets minus its liabilities. Some insurance companies may deplete their surplus too far to be unable to fulfill their obligations to their policyholders. To protect policyholders against insolvency of an insurance company, government regulations may require insurance companies to maintain a minimum surplus. The size of an insurance companies surplus is thus considered as an important factor to rate insurance companies. To maintain a surplus and protect against insolvency insurance companies may purchase their own insurance policies, i.e. reinsurance policies.
An insurance company, also known as primary or ceding company, may purchase a reinsurance policy from a reinsurance company, also known as reinsurer, in much the same way that direct or primary insurance is purchased. The primary or the first insurer may also be called a cedent, and the secondary or the second insurer may be called a reinsurer. Reinsurance organizations may include cedents, reinsurers, and any other entities involved in reinsurance transactions. Reinsurance may protect a cedent against catastrophes and cumulative losses and also enable it to accept risks that exceed its own underwriting capacity.
The complexity of the reinsurance field tends to require software for reinsurance administration to be complex as well. Generally speaking, software for reinsurance administration may be expected to handle risk selection, portfolio analysis, policy administration, claims, accounting, and other areas vital to the reinsurance field. Reinsurance profits may depend on analysis of historical information, the ability to predict trends, and the ability to identify cumulative exposures within a current portfolio, and reinsurance software may therefore be expected to meet requirements relating to those functions. Consequently, the development of a software system for reinsurance administration to meet the above-identified needs may require great time and expense.
In a changing reinsurance market, a reinsurance company may quickly fall behind its competitors. For example, as reinsurers begin taking on direct risks, the market may demand integrated solutions. Some reinsurance computer systems may not be able to easily and quickly migrate the graphical user interfaces from a text based display to a color, graphical display. Some reinsurance computer systems may be unable to modify and customize a reinsurance contract, such as adjustment of an insurance period, changing premium limits, etc. to meet a customer requirement in a prompt manner. A reinsurer may need to move quickly against competitors to meet the changing needs of the market or to revitalize a reinsurance product line. Therefore, it would be advantageous for a reinsurer to reduce the time, expense, and risk associated with a complex product development effort that may require more than one hundred person-years of development time. Even during development, technical and functional requirements may evolve as dozens of potential customers instruct the reinsurer of their customized needs. It would be further advantageous for a reinsurer to have a flexible development process that can meet evolving customer requirements in the middle of a development effort.
Utilization of object-oriented software design techniques is one approach towards reducing development time. Object-oriented software design may include the use of objects and classes. An object may include an encapsulation of data and methods for manipulating the data. A class may include a template for an object. An object is therefore an instance of a class, and an object is created by instantiating it from a class. Object-oriented techniques, when used properly, may permit the re-use of previously written program code such as classes. The use of development frameworks is a related approach towards reducing development time. As used herein, a “framework” may include a set of classes or templates that embodies an abstract design for solutions to a number of related problems.
Therefore, there is a need for a system and method for developing computer programs for reinsurance administration with decreased development time and increased flexibility.